Beware of Bitcoin's possible incompatibility with some major services

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A subsection of the Bitcoin economy including prominent businesses such as Coinbase, Xapo, and BitPay have signed an agreement to adopt and implement a contentious hard fork of Bitcoin sometime in November. A hard fork is a backwards incompatible change to the Bitcoin network. This hard fork is not supported by the majority of the Bitcoin users and developers and is therefore a contentious hard fork. By adopting this hard fork, we believe the supporters of this agreement are shifting their users to an alternative currency (an altcoin) which is incompatible with Bitcoin.

The signatories of this agreement wrongly believe that the currency created by adopting this contentious hard fork will eventually become Bitcoin. Therefore storing any BTC on services such as Coinbase, Bitpay and Xapo is strongly not recommended. By storing BTC on these services, you could find that after the hard fork, your BTC has been renamed to something else or replaced entirely with the new altcoin. The best way to ensure that your BTC is protected is to download the latest version of Bitcoin Core and transfer out any BTC stored on services that are a signatory to this agreement. We have listed the businesses supporting this contentious hard fork at the bottom of this document.

For users who aren’t prepared to install Bitcoin Core and go through the lengthy set up process, we recommend a wallet such as GreenAddress or Electrum. Avoid using web wallets like blockchain.info. However users should only use these wallets to store their coins and never perform transactions until well after the hard fork. Any transactions you make on the Bitcoin blockchain can also be replicated and “replayed” on the altcoin chain. If the coins on the contentious hard fork have any value, there will be methods you can use to “split” your coins and have access to them. Pay extra attention to major Bitcoin communication channels and media shortly after the fork so you stay informed.

Mobile wallets

Miners in Bitcoin are responsible for transaction ordering through putting transactions into blocks, and collectively creating a chain of these blocks. Most mobile wallets depend on blindly trusting the longest chain produced by the miners in order to safely send and receive transactions. There is considerable mining power supporting the contentious hard fork. A majority of miners have pledged to support the contentious hard fork, therefore the longest chain as seen by most mobile wallets may not be the true block chain. As a result of this, spending money from a mobile wallet during a hard fork is dangerous. You will be vulnerable to many attacks as your wallet is not aware that the miners are breaking the consensus rules on the longest chain.

If the contentious hard fork has failed and the majority of miners have broken their pledge to support the hard fork, it is safe to continue using mobile wallets, however you should check multiple sources of Bitcoin news such as this website, /r/bitcoin, and bitcoin.org to make sure that it’s safe to continue using your particular wallet. As a general rule, you should not perform any transactions during and shortly after the hard fork.

After the fork

Blocks may be slower shortly after the hard fork and your transactions will take longer to confirm. You will have to pay a higher transaction fee if your transaction is high priority and you want it confirmed in the next block. You should try to get any important transactions done a few days before the hard fork date. A lot of websites and programs will likely pop up around the time of the hard fork offering to split your Bitcoin so you can have access to both your BTC and to the new altcoin created by this contentious hard fork, you should exercise caution as many of these services are likely to be scams trying to steal your bitcoin. As the hard fork has very little replay protection, most transactions you perform on the Bitcoin network will also be valid on the hard fork network. You should keep this in mind when transacting.

Some services may continue to present and name the altcoin created by this contentious hard fork as Bitcoin. Users should be aware that this new currency is not Bitcoin. Bitcoin can only be changed with the overwhelming consensus of the entire Bitcoin community of individuals, miners, developers and economy. Even when there is overwhelming consensus, unless in an emergency, a hard fork should have at least a year notice period to give enough time for users to upgrade. This hard fork being adopted by the signatories of this agreement achieves none of these things. It is a rushed and hasty upgrade which only has minority community support and has been thoroughly rejected by users and the technical community. As this new altcoin is not Bitcoin, Bitcoin.org will not list wallets and services that present this altcoin as “Bitcoin” or “BTC” to their users after the hard fork. These services have exited the Bitcoin system in a contentious manner and therefore are no longer useful to our visitors.

The following companies and services have pledged to adopt the contentious hard fork:

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Hey guys, Werner from Luno here. There's a lot of noise and confusion around the upcoming fork.

Some people and websites seem to think/claim that the list of companies in that list will entirely drop support for Bitcoin (in its current form today) and only support the SegWit2X chain (and call that new chain "Bitcoin") and they're getting called out for that misinterpretation.

As with Bitcoin Cash, if a new token is secure, has value/demand and is adopted by the market, we'll give our customers access to those tokens. We want to ensure that customers don’t lose value associated with their funds, so if we didn't give access to BCH tokens, our customers would have lost value. The same applies to upcoming forks.

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The SegWit2x fork is an attempt at a hostile / corporate takeover of bitcoin, that I think will probably fail. It will most likely cause some volatility in the price, hopefully it will get sorted quickly.

Obviously many bitcoin companies and exchanges will be waiting to see which chain, the legacy one or the segwit2x one will be considered bitcoin. Once they know that, they will use that chain going forward.

If the mining power moves to the segwit2x chain in accordance with the agreement, they will most likely come back to the legacy chain when there is no real value for the 2x version. They follow the money and will mine what is most profitable.

The New York Agreement was spearheaded by Barry Silbert who runs Digital Currency Group, which invested in and has some clout with many companies in the space, hence their listing on that shaming list by bitcoin core. (http://dcg.co/portfolio/) Many of them have to basically do what Barry says.

Some companies have publicly said they are withdrawing from the agreement, and currently there is a 32% dropout rate (http://segwit.party/nya/)

There is no reason for the fork right now except to basically replace the core team of current bitcoin developers which work on an open source system, with a small group that could be controlled and used to make changes without consensus. There is no urgent need for the blocksize to be increased, and some companies only signed it so that miners would activate segwit in the first place.

The majority of users who run nodes, and users of bitcoin who know enough about bitcoin do not want the segwit2x version of bitcoin. It is going to be interesting times...

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Just in case you missed it, the bitcoin2X fork called off - The hard fork was scheduled to occur at the block height of 494,784 around November 16th but has been canceled. The suspension was announced in an email written by Mike Belshe, CEO and co-founder of bitcoin wallet software provider BitGo, and signed by the other people running the companies who were trying to do the hard fork (Mike Belshe, Wences Casares, Jihan Wu, Jeff Garzik, Peter Smith and Erik Voorhees). https://lists.linuxfoundation.org/pipermail/bitcoin-segwit2x/2017-November/000685.html

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Do you think miners will shift to bitcoin cash instead, it got a lot of traction all of a sudden?

I reckon some will, but most will stay on bitcoin. I think short term bcash will pump and dump before settling down, and bitcoin will rocket higher once the institutional money start pouring in with the futures market....miners will follow the money